DRUMMONDVILLE, QC, Aug. 13, 2014 /CNW Telbec/ - CVTech Group Inc.
("CVTech" or "the Corporation") (TSX: CVT) today reported results for
the second quarter ended June 30, 2014. All amounts are in Canadian
dollars unless otherwise indicated.
"CVTech achieved another solid revenue growth in the second quarter of
2014, mainly as a result of strong increases in business activity in
the U.S. and Ontario. However, the rapid business growth in Ontario
required a greater recourse to subcontracting, which negatively
affected operating profitability", said Pierre L. Gauthier, President
and Chief Executive Officer of CVTech.
Three months ended June 30
Six months ended June 30
(in thousands of dollars, except per-share data)
Per share - basic and diluted ($)
Weighted average number of shares outstanding (basic, in thousands)
Revenues were $77.9 million, up 40.9% from the second quarter of 2013.
The increase was due mainly to growth in revenues from contracts for
the construction, maintenance and repair of underground lines, from
contracts related to mechanical work and from contracts associated with
electrical energy projects for industrial, commercial and institutional
customers. In addition, the conversion effect resulting from
fluctuations in the value of the Canadian dollar increased the value of
U.S.-dollar-denominated revenues for the quarter ended June 30, 2014 by
$3.2 million compared to the same period in 2013. However, revenues
from contracts for the construction, maintenance and repair of
electricity distribution lines were lower.
Revenues from work carried out in the U.S. were up 32.0% to $51.0
million, while revenues from contracts performed in Canada were up
61.6% to $27.0 million. Reflecting increased market penetration, the
Corporation's Ontario revenues grew strongly, to $16.2 million in the
second quarter of 2014 compared to $2.6 million in the second quarter
Earnings before interest, taxes, depreciation and amortization
("EBITDA") were $1.8 million, or 2.3% of revenues, compared to negative
EBITDA of $16,000, or 0.0% of revenues, in the second quarter of 2013.
The improvement, both in dollars and as a percentage of revenues,
reflects growth in sales volume, offset in part by greater recourse to
subcontracting in Ontario. EBITDA in the second quarter of 2013 had
been affected by an unprofitable contract in the U.S. and by the
start-up of projects in new market segments.
For the second quarter of 2014, the Corporation recorded a net loss of
$691,000, or $0.01 per basic and diluted share, compared to a net loss
of $1.8 million, or $0.02 per basic and diluted share, in the second
quarter of 2013.
At June 30, 2014, the value of the Corporation's order backlog was
approximately $176.0 million, compared with $213.0 million at the end
of the previous quarter.
Revenues for the six months ended June 30, 2014 were $149.1 million, up
33.5% from $111.7 million in the six months ended June 30, 2013. The
conversion effect increased the value of U.S.-dollar-denominated
revenues for the six months ended June 30, 2014 by approximately $7.0
million compared to the same period a year earlier. Revenues from work
carried out in the U.S. were up 21.1% to $94.5 million, while revenues
from contracts performed in Canada were up 62.4% to $54.6 million.
EBITDA for the first six months of 2014 was $6.4 million, or 4.3% of
revenues, up from $2.3 million, or 2.0% of revenues, a year earlier.
Net earnings were $726,000, or $0.01 per basic and diluted share,
versus a net loss of $1.8 million, or $0.02 per basic and diluted
share, in the same period a year earlier.
During the second quarter of 2014, CVTech entered into an agreement with
a banking syndicate for a total of $65.0 million in bank financing. The
financing obtained consists of a renewable credit facility of $40.0
million in Canadian dollars, on which funds may also be drawn in U.S.
dollars, and a long-term loan of an authorized amount of $25.0 million.
These financing sources, which have a three-year term, replaced the
previous agreements and provide the Corporation with greater financial
flexibility in the execution of its action plan.
The Corporation has used part of the long-term loan under this banking
agreement to repay certain bank loans, thus providing a better balance
between current and long-term financing. Consequently at June 30, 2014
the Corporation's long-term debt, including the current portion, was
$27.4 million, compared to $17.0 million three months earlier. The
ratio of long-term debt to equity was 0.33 at June 30, 2014, compared
to 0.20 three months earlier. However, the balance of bank loans
outstanding was reduced by $11.3 million during the quarter to $23.2
million at June 30, 2014. The Corporation held $1.6 million in cash at
"Our priority is to pursue the deployment of our new organizational
structure. It is now in place in the U.S., while in Canada our
strategic review is continuing and we expect to implement the new
structure in late 2014 or early 2015. This initiative will bring the
Corporation increased flexibility to take advantage of new trends and
new business opportunities. It will position CVTech advantageously with
reference to the evolution of the industry, in particular regarding
sources of electric power generation and the potential for related
services, in order to offer its customers a complete range of
high-value-added services", concluded Mr. Gauthier.
EBITDA is a measure that has no standardized meaning prescribed by IFRS
and is thus considered to be a non-IFRS measure. Therefore, this
measure may not be comparable to similar measures presented by other
issuers. This measure is presented and described in this release in
order to provide additional information regarding the Corporation's
liquidity and its ability to generate funds to finance its operations.
This document may contain forward-looking statements that reflect
management's current expectations regarding future events.
Forward-looking statements are based on a number of factors and include
risks and uncertainties. Actual results may differ from forecast
results. Management assumes no obligation beyond what is required under
the law to update or revise forward-looking statements pursuant to new
information or future events.
OVERVIEW OF THE CORPORATION
CVTech is a company operating in the energy sector. The Corporation is a
leading provider of construction and maintenance services to the public
utility and heavy industrial markets mainly in Quebec, Ontario and the
eastern United States. Through its subsidiaries, the Corporation
provides maintenance and construction services for electricity
transmission and distribution networks, substations and electrical
power houses, as well as the control of vegetation on rights-of-way for
Further information regarding CVTech is available in the SEDAR database
(www.sedar.com) and on the Corporation's website at www.cvtech.ca.
SOURCE: CVTECH GROUP INC.
For further information:
Pierre L. Gauthier
President and Chief Executive Officer
Mario Trahan, CPA, CMA
Chief Financial Officer
Martin Goulet, CFA